Estimating the Economic
Boost of Marriage for
Same-Sex Couples in
Colorado
By Christy Mallory and M.V. Lee Badgett
April 2014
Executive Summary
If marriage is extended to same-sex couples in Colorado, the state would see an economic boost as same-sex
couples plan their weddings and as their out-of-state guests purchase goods and services in the state. This study
estimates the impact on the state’s economy and on state and local sales tax revenue.
•
We predict that 6,212 in-state same-sex couples would choose to marry in the three years following an
opening of marriage to same-sex couples in Colorado.
•
The total spending on wedding arrangements and tourism by resident same-sex couples and their guests
would add an estimated $50 million to the state and local economy of Colorado over the course of
three years, with a $32 million boost in the first year alone.
•
This economic boost would likely add $3.7 million in tax revenue to state and local coffers, with an
estimated $2 million occurring in the first year.
•
Spending related to same-sex couples’ wedding ceremonies and celebrations would support 436 fulland part-time jobs in the state.
•
Although in-state couples in existing marriages and civil unions may spend less on weddings than
couples that do not have that status, we conclude that spending by out-of-state couples who choose to
marry in Colorado will offset the impact of reduced wedding spending by couples already in marriages
or civil unions. However, even if we do not account for spending by out-of-state couples and we assume
that couples in existing civil unions and marriages spend nothing on their weddings, we would still
expect an economic boost of $32 million to the state and local economy of Colorado and $1.4 million in
state and local tax revenue.
1
Introduction
In-State Couples
If the State of Colorado grants same-sex couples
In order to assess the economic impact of
the right to marry, we predict that the State will
opening marriage to same-sex couples in
see a surge in spending related to weddings by
Colorado, we must first calculate the number of
same-sex couples who currently reside in
same-sex couples who will marry.
Colorado, as well as an increase in tourism
to U.S. Census 2010, Colorado has 12,424
spending by wedding guests from other states.
resident same-sex couples.1 We draw upon the
This increase in spending would benefit
experiences of other states that have permitted
Colorado’s
tourism-related
marriage between individuals of the same-sex
businesses and would generate additional tax
to estimate the number of same-sex couples
revenue for state and local coffers.
who might elect to enter a marriage in
wedding
and
According
Colorado. In Massachusetts, a little more than
In this report, we estimate the size of the
50% of same-sex couples married during that
impact on Colorado’s businesses and on the
initial
state and local sales tax revenue for the first
three-year period. 2 This prediction
conforms to detailed data regarding rates at
three years that same-sex couples are allowed
which same-sex couples have married in several
to marry. The figures in this report are based on
other jurisdictions that have recently allowed
the best available data from several sources.
them to do so. 3 Accordingly, we predict that
We draw upon data indicating average wedding
half of the same-sex couples in Colorado would
expenditures in Colorado, state tourism reports,
marry in the first three years.
U.S. Census 2010 data on same-sex couples,
along with data regarding marriage expenses
Note that not all of these couples will marry
incurred by same-sex couples in other states.
within the first year that they are permitted to
do so. We use data from Massachusetts to
Based on the analysis set forth in detail below,
predict the timing and adjust our results
we predict that in the first three years that
throughout this report. Out of the total
same-sex couples are permitted to marry in
marriages of same-sex couples that took place
Colorado, the state’s wedding and tourism-
in Massachusetts in the three-year period
related businesses would see spending rise by
following 2004, 64% of marriages occurred in
$32 million to $50 million. As a result, state and
the first year, 21% in the second year, and 15%
local tax revenues would rise by $2.4 million to
in the third year. 4 Therefore, we predict that in
$3.7 million.
Colorado 64% of 6,212 same-sex couples would
2
marry in the first year (Year 1), or 3,976
Out-of-State Guests
couples. An additional 21% would marry in the
In 2008, a report based on the Health and
second (Year 2), bringing the total to 85% of
Marriage Equality in Massachusetts Survey
6,212, or 5,280 couples. And finally, all 6,212
indicated
couples would be married by the end of the
weddings included an average of 16 out-of-
third year (Year 3) (Table 1).
town guests. 7 In order to estimate the out-of-
Wedding Spending
state guest spending, we use the per diem
that
Massachusetts
same-sex
allowance for meals and lodging set forth by the
According to The Wedding Report, the average
U.S. General Services Administration (GSA). The
spending on weddings in Colorado in 2012 was
GSA’s per diem allowance rates are used by
$26,053. 5 Due to societal discrimination, same-
federal government agencies to reimburse their
sex couples may receive less financial support
employees’ business-related travel expenses. 8
from their parents and other family members to
For the 2013-2014 fiscal year, the GSA’s state-
cover wedding costs, resulting in overall
wide average per diem rate for lodging in
reduced spending. Also, only spending that
Colorado is $95 9 and the state-wide average per
comes from couples’ savings would truly be
diem rate for meals is $52.10
“new spending” for the state’s businesses,
rather than money diverted from some other
We assume that same-sex couples who are
expenditure. To take these factors into account,
residents of Colorado will have a similar count
as in previous studies by the Williams Institute,
of 16 out-of-state guests at their ceremonies as
we estimate here that same-sex couples spend
indicated in the Massachusetts survey.
one-quarter of the amount that different-sex
assume that each of these guests will spend the
couples spend on wedding arrangements. 6
average GSA per diem rate for meals for a one
Accordingly, we assume that same-sex couples
day visit. We further assume that guests will
will have spent $6,513 per wedding.
share a room and stay for one night.
Using this figure, the calculated total for the
Based on these assumptions, the total estimate
estimated 6,212 resident couples sums to $40.5
for out-of-state guests for weddings of resident
million in additional wedding spending for the
same-sex couples is calculated to be 99,392
first three years (Table 1).
people,
leading
to
additional
tourism
expenditures of almost $10 million (Table 1).
3
We
Revenue: Sales Tax
For a conservative total tax revenue estimate,
State and local governments will directly benefit
we have not included tax revenue gained from
from this increase in spending through the state
lodging-specific taxes that vary across the state.
sales tax and various local sales taxes. As
Lodging taxes, where applied, can add several
indicated in Table 1, we estimate that a decision
percentage points to the local tax rate. For
by Colorado to allow same-sex couples to marry
example, Denver imposes a lodging tax of
would result in approximately $50 million in
10.75%. 13 Accounting for lodging taxes would
additional spending on weddings and tourism in
increase the estimate of total revenue collected
the state.
by local governments.
According to a 2014 report by the Tax
Impact of Out-of-State Couples,
Foundation, the State of Colorado imposes a
Existing Marriages, and Civil
sales tax of 2.90%.
11
Additionally, localities in
Unions
Colorado impose an average sales tax rate of
Our estimate does not take into account the
4.49%. Thus, the average combined state and
impact of same-sex couples from other states
local sales tax burden of 7.39%.12 We use this
who travel to Colorado to marry, or the impact
average percentage as the combined state and
of existing marriages and civil unions among
local tax rate when calculating our figures.
Colorado’s same-sex couples.
By applying the various tax percentages to the
Out-of-state couples traveling to Colorado to
categories in Table 1, we estimate that the
overall
spending
boost
will
marry would generate spending on wedding-
generate
related goods and services and, most likely, on
approximately $3.7 million in tax revenue for
tourist-related goods and services. By contrast,
state and local governments in the first three
Colorado couples who have already married
years same-sex couples may marry (Table 2).
elsewhere or are in existing civil unions may
Although a further breakdown distinguishing
choose to convert their civil union or out-of-
state and local tax revenue is difficult to
state marriage to a marriage in Colorado
calculate due to the varying combined tax
without significant spending on a wedding
burdens across the cities and counties of
ceremony or celebration.
Colorado, we estimate that local sales taxes will
We do not have enough data to predict exactly
provide an estimated $2.3 million of tax
how many couples from other states would
revenue directly to local governments (Table 3).
travel to Colorado to marry or to predict how
4
many same-sex couples in Colorado are already
same-sex couples to marry. 19 It is likely that if
married or in a civil union. However, based on
Colorado opens marriage to same-sex couples,
available data from other states, we conclude
and if it issues licenses to both in-state and out-
that spending by out-of-state couples who
of-state same-sex couples, the state will
choose to marry in Colorado will offset the
become one of several destinations for out-of-
impact of existing marriages and civil unions.
state
same-sex
couples
looking
for
the
opportunity to marry within the United States.
A recent Williams Institute study indicates that
same-sex couples will travel from out of state to
If even only two percent of the same-sex
marry if they cannot marry in their home state,
couples from the top five states that send the
as seen in the experiences of several states. 14
most visitors to Colorado choose to travel to
For example, of the total number of marriages
Colorado to marry, the spending impact of
by same-sex couples during the first year
these guests will likely offset the impact of
following the Iowa Supreme Court decision in
existing marriages and civil unions.
Varnum v. Brien, 866 couples who married were
Recent data suggest that the number of
Iowa residents and 1,233 couples were non-
Colorado couples who have married in other
residents. Notably, the top five contributors of
non-resident
same-sex
couples
states is small. For example, only 20 same-sex
were
couples from Colorado had married in Iowa by
surrounding states in the Midwest. Media
2010. 20
reports suggest that these out-of-state couples
have generated notable tourism and wedding
Other data suggests that, on average, the take-
related spending in other states. 15
up rate for civil unions in the first year that they
are available to same-sex couples is 18%. 21
According to a 2012 Colorado travel report, the
Applying the average first-year take-up rate to
five states that send the most visitors to
the number of same-sex couples in Colorado
Colorado are California, Texas, Arizona, Florida,
indicates that 2,236 same-sex couples in
and Utah. 16 Of these states, only California
Colorado may already be in a civil union or will
currently allows same-sex couples to marry. 17
enter one within the next month. 22
The total number of same-sex couples within
number is smaller than two percent of the
the five states (not including California) that
same-sex couples who live in the five states that
send the most visitors to Colorado is 114,617. 18
send the most visitors to Colorado (2,292).
Further, only one of the seven states bordering
Colorado—New
Mexico—currently
This
allows
5
Even if we do not count out-of-state couples
Conclusion
and conservatively assume that the estimated
In this study, we have drawn on information
2,236 couples in civil unions spend no money on
regarding marriage spending by same-sex
a wedding ceremony or celebration, we
couples in other states, along with Colorado
estimate that the state will still experience an
wedding expenditure and tourism data, to
economic boost of $32 million to the state and
estimate the economic boost if Colorado
local economy and $1.4 million in state and
extends the right to marry to same-sex couples.
local sales tax revenue over the first three years
Our calculations indicate that the total spending
that marriage is available to same-sex couples
on wedding arrangements and tourism by
(Table 1 & Table 2).
same-sex couples and their guests would be
Further Impacts
approximately $50 million over three years,
with about $32 million in the first year alone.
The economic impact of same-sex couples’
We estimate that total economic boost over
wedding ceremonies and celebrations is more
three years would generate about $3.7 million
far reaching than just the effects on local
in tax revenue for the state and various
businesses and state and local sales tax
localities.
receipts. For example, a surge in spending in
employment
It is important to note that also allowing out-of-
residents.
state same-sex couples the opportunity to wed
According to a report on the economic impact
will likely result in further economic gains for
of tourism in Colorado in 2012, 144,600 full-
Colorado businesses. This impact would then
and part-time jobs were supported by $16.7
translate into additional increased tax revenue
billion in spending in the state.23 Thus, we
for the state and local budgets.
the
state
opportunities
can
for
generate
Colorado
calculate that for every $115,491 spent in
Finally, we note that sales taxes only capture
Colorado, one job will be generated. Based on
the most direct tax effects of increased tourism
our estimate that spending related to same-sex
and wedding expenditures. Businesses and
couples’ weddings in Colorado will boost the
individuals also pay taxes on the new earnings
economy by $50 million in the first three years,
generated by wedding spending, providing a
we conclude that extending the right to marry
to
same-sex
couples
would
further
generate
approximately 436 new jobs for Colorado
residents.24
6
boost
to
the
state
budget
Table 1. Colorado Wedding Spending and Tourism Figures by Resident Same-Sex Couples and their Guests
SPENDING
Year 1
Year 2
Year 3
Total
3,976
1,304
932
6,212
$25,895,688
$8,492,952
$6,070,116
$40,458,756
63,616
20,864
14,912
99,392
Out-of-Town Guest Spending
$6,329,792
$2,075,968
$1,483,744
$9,889,504
TOTAL SPENDING- HIGH END
$32,225,480
$10,568,920
$7,553,860
$50,348,260
2,545
835
596
3,976
$11,598,255
$3,801,245
$2,723,280
$18,122780
$20,627,225
$6,767,675
$4,830,580
$32,225,480
# of Marriages by Same-Sex Couples
Wedding Spending
Out-of-Town Wedding Guests
# of possible couples in civil unions marrying
without ceremony
Deduction for possible couples in civil unions
marrying without ceremony (including wedding
spending and guest spending)
TOTAL SPENDING- LOW END
Table 2.
Tax Revenue from Wedding Spending and Tourism by Resident Same-Sex Couples and their Guests
TAX REVENUE
Year 2
Year 3
$25,895,688
$8,492,952
$6,070,116
$40,458,756
Tax Revenue from Wedding Spending
$1,913,691
$627,629
$448,582
$2,989,902
Out-of-Town Guest Spending
$6,329,792
$2,075,968
$1,483,744
$9,889,504
Out-of-Town Guest Tax Revenue
$467,771
$153,414
$109,649
$730,834
TOTAL TAX REVENUE- HIGH END
$2,381,463
$781,043
$558,230
$3,720,736
$11,598,255
$3,801,245
$2,723,280
$18,122780
$857,111
$280,912
$201,250
$1,339,273
$1,524,352
$500,131
$356,980
$2,381,463
Wedding Spending
Deduction for possible couples in civil unions
marrying without a ceremony (including
wedding spending and guest spending)
Deduction in taxes for possible couples in civil
unions marrying without ceremony
TOTAL TAX REVENUE- LOW END
Year 1
7
Total
Table 3.
Tax Revenue by Type of Tax
TAX REVENUE
State Sales
Tax
(2.9%)
Various Local Sales
Taxes
(4.49%) 25
Total
TOTAL- HIGH END
$1,460,099
$2,260,637
$3,720,736
TOTAL- LOW END
$934,539
$1,446,924
$2,381,463
About the Authors
Christy Mallory is Senior Counsel at the Williams Institute, UCLA School of Law.
M.V. Lee Badgett is the Research Director at the Williams Institute, and Director of the Center for Public
Policy and Administration at the University of Massachusetts Amherst, where she is also a Professor of
Economics. She studies family policy and employment discrimination related to sexual orientation.
For more information
The Williams Institute, UCLA School of Law
Box 951476
Los Angeles, CA 90095‐1476
(310)267‐4382
williamsinstitute@law.ucla.edu
http://williamsinstitute.law.ucla.edu
8
Endnotes
1
Gates, Gary J. & Cooke, Abigail M., Colorado Census Snapshot: 2010 (The Williams Institute, 2011), available at
http://williamsinstitute.law.ucla.edu/wp-content/uploads/Census2010Snapshot_Colorado_v2.pdf.
2
Data reveals that 9,931 same-sex couples married in Massachusetts within three years of the state allowing
same-sex couples to marry. Next, we estimate the total number of same-sex couples in Massachusetts. Data from
the pre-2008 ACS overcounts the total number of same-sex couples. See also Gates, Gary J. Same-Sex Spouses and
Unmarried Partners In The American Community Survey, 2008 (The Williams Institute, 2008), available at
http://williamsinstitute.law.ucla.edu/wp-content/uploads/Gates-ACS2008FullReport-Sept-2009.pdf.
Accordingly, we use 2008 ACS data to estimate the total number of same-sex couples in Massachusetts in 2004, or
19,550 couples. This suggests that approximately 51% of couples married over three years.
3
Badgett, M.V. Lee & Herman, Jody L. Patterns of Relationship Recognition by Same‐Sex Couples in the United
States (The Williams Institute, 2011).
4
Ibid.
5
The Wedding Report. (2012). Colorado – (State) Complete Market Report. Retrieved from
http://www.theweddingreport.com/wmdb/index.cfm?action=db.viewdetail&t=s&lc=08&setloc=y.
6
Badgett, M.V. Lee & Gates, Gary J. The Effect of Marriage Equality and Domestic Partnership on Business and the
Economy. (The Williams Institute, 2006), available at http://williamsinstitute.law.ucla.edu/research/economicimpact-reports/the-effect-of-marriage-equality-and-domestic-partnership-on-business-and-the-economy/
7
Goldberg, Naomi G., Steinberger, Michael D. & Badgett, M.V. Lee. The Business Boost from Marriage Equality:
Evidence from the Health and Marriage Equality in Massachusetts Survey (The Williams Institute, 2009). Retrieved
from http://williamsinstitute.law.ucla.edu/research/economic-impact-reports/the-business-boost-from-marriageequality-evidence-from-the-health-and-marriage-equality-in-massachusetts-survey/
8
The per diem lodging rates are based on Average Daily Rate data from lodging properties that meet the GSA’s
criteria. The per diem meal rates are based on data received from restaurants. More information about the GSA’s
per diem rates is available at http://www.gsa.gov/portal/content/104208#4.
9
To calculate the average per diem for lodging in Colorado, we first averaged the monthly per diems for each
locality in the state with a specified rate over the course of a year to get the annual per diem for each specifiedrate locality. Next, we calculated a state-wide per diem rate by averaging the annual per diem for each specifiedrate locality (weighted by percentage of the state’s adult population in each locality) and all localities where the
standard, national per diem rate applies (weighted by the percentage of the state’s adult population in the areas
where the standard rate applies). U.S. Gen. Svcs. Admin. (2014). FY 2014 Per Diem Rates for Colorado. Retrieved
from http://www.gsa.gov/portal/category/100120
10
The per diem average for meals in Colorado was calculated by averaging the meal per diems for each locality
with a specified rate (weighted by percentage of the state’s adult population in each locality) and all localities
where the standard, national rate applies (weighted by the percentage of the state’s adult population in the areas
where the standard rate applies). Ibid.
11
Tax Foundation. (2014). State and Local Sales Tax Rates in 2014. Retrieved from
http://taxfoundation.org/article/state-and-local-sales-tax-rates-2014
12
Ibid.
9
13
City and County of Denver, Colo. Tax Guide: Topic No. 52, Lodger’s Tax. Retrieved from
https://www.denvergov.org/Portals/571/documents/TaxGuide/Lodger%27s%20Tax.htm.
14
Kastanis, Angeliki, Badgett, M.V. Lee & Herman, Jody L., Estimating the Economic Boost of Marriage Equality in
Iowa: Sales Tax (The Williams Institute, 2011), available at
http://williamsinstitute.law.ucla.edu/research/economic-impact-reports/estimating-the-economic-boost-ofmarriage-equality-in-iowa-sales-tax/
15
Bly, Laura. (2004, February 26). Localities Cashing in on Same-Sex Marriages. USA Today. Retrieved September 6,
2011, from http://www.usatoday.com/travel/news/2004-02-26-same-sex-marriage_x.htm (See also
http://www.businessweek.com/magazine/a-gay-wedding-windfall-for-new-york-10202011.html). Goldberg, Naomi
G., Steinberger, Michael D. & Badgett, M.V. Lee. The Business Boost from Marriage Equality: Evidence from the
Health and Marriage Equality in Massachusetts Survey (The Williams Institute, 2009), available at
http://williamsinstitute.law.ucla.edu/research/economic-impact-reports/the-business-boost-from-marriageequality-evidence-from-the-health-and-marriage-equality-in-massachusetts-survey/.
16
Longwoods Int. (2013). Colorado Travel Year 2012. p. 107. Retrieved from
http://www.colorado.com/sites/colorado.com/master/files/2012Visitor%20FinalReportonline.pdf
17
Hollingsworth v. Perry, 570 U.S. __ (2013). Additionally, a federal district court judge in Utah ruled that the
state’s ban on same-sex marriages violates the U.S. Constitution. However, the decision was stayed pending
appeal, so same-sex couples are not currently permitted to marry in the state. Kitchen v. Herbert, No. 2:13-cv-217
(D. Utah Dec. 20, 2013); Herbert v. Kitchen, 571 U.S. __ (Jan. 6, 2014) (order granting stay).
18
Gates, Gary J. & Cooke, Abigail M. (2011). Arizona Census Snapshot: 2010; Florida Census Snapshot: 2010; Texas
Census Snapshot: 2010; Utah Census Snapshot: 2010. Retrieved from http://williamsinstitute.law.ucla.edu/
19
Griego v. Oliver, No. 34,306 (N.M. Dec. 19, 2013). Additionally, a federal district court judge in Utah ruled that
the state’s ban on same-sex marriages violates the U.S. Constitution. However, the decision was stayed pending
appeal, so same-sex couples are not currently permitted to marry in the state. Kitchen v. Herbert, No. 2:13-cv-217
(D. Utah Dec. 20, 2013); Herbert v. Kitchen, 571 U.S. __ (Jan. 6, 2014) (order granting stay).
20
Ibid.
21
Badgett, M.V. Lee & Herman, Jody L. Patterns of Relationship Recognition by Same‐Sex Couples in the United
States (The Williams Institute, 2011).
22
Civil unions have been available to same-sex couples in Colorado since May 1, 2013. Meyer, Jeremy P. Denver
Post. (2013, April 23). Civil Union Ceremonies Scheduled to Begin at Midnight May 1 in Denver. Retrieved from
http://www.denverpost.com/ci_23089926/civil-union-ceremonies-scheduled-begin-at-midnight-may?source=pkg
23
Dean Runyan Assoc. (2013). Colorado Travel Impacts: 1996-2012. p. 6. Retrieved from
http://www.deanrunyan.com/doc_library/COImp.pdf
24
These employment figures were generated by using the tourism expenditures of the out-of town guests.
25
Tax Foundation. (2014). State and Local Sales Tax Rates in 2014. Retrieved from
http://taxfoundation.org/article/state-and-local-sales-tax-rates-2014.
10